Last Update 05 Jan 26

Fair value Increased 4.28%

ENR: Buyback Plan And Gas Grid Upswing Will Guide Forward Returns

The analyst price target for Siemens Energy has moved higher from €119.92 to €125.04, as analysts cite a series of upward revisions across the Street that reflect updated assumptions for revenue growth, profit margins and valuation multiples in light of recent research highlighting demand for the company's gas and grid offerings.

Analyst Commentary

Recent research on Siemens Energy has leaned more supportive, with several large banks revisiting their models and resetting price targets at higher levels. The focus is squarely on how reliably the company can execute on its gas and grid opportunities and how much of that is already reflected in the share price.

Bullish Takeaways

Bullish analysts see the current valuation as not fully reflecting the breadth of Siemens Energy's portfolio in gas and grid, which they view as well aligned with long term investment needs in energy infrastructure.
Multiple firms have lifted price targets into a €100 to €136 range. This signals that their updated models support higher equity value assumptions than before, even while some ratings remain Neutral.
The upgrade to Buy from Hold with a move in price target from €55 to €134 is framed as a reassessment of mispricing. The shares are viewed as undervalued relative to the scale of demand that analysts expect for the company's offerings.
Coverage initiations and reiterations with positive stances point to a view that the gas and grid segments can support more resilient order intake and earnings power than previously embedded in some forecasts.

Bearish Takeaways

Not all analysts are willing to move to an outright positive stance, with some keeping Neutral ratings even as they raise price targets to €100 and €116. This suggests residual uncertainty around execution and earnings quality.
Higher targets paired with only Neutral views hint that some analysts see limited upside from current levels in their base case, once known risks and prior operational issues are factored into their models.
The range of price targets, from around €100 up to €136, highlights differing opinions around how consistently Siemens Energy can convert its gas and grid opportunity into stable margins and cash flow.
The clustering of targets close to one another, despite different ratings, indicates that a portion of the Street is cautious about assuming further re rating without clearer evidence on long term profitability trends.

What's in the News

Siemens Energy AG has announced a share repurchase program of up to €6,000 million, with the program valid until the end of fiscal year 2028 (Key Developments).
The Board of Directors authorized a buyback plan on November 20, 2025, providing a formal framework for the repurchase activity (Key Developments).
Oklo Inc. and Siemens Energy signed a binding contract for the design and delivery of the power conversion system for Oklo's Aurora powerhouse at Idaho National Laboratory, covering engineering and supply of a condensing SST-600 steam turbine, an SGen-100A industrial generator, and related auxiliaries (Key Developments).
Under the Oklo contract, Siemens Energy is set to begin detailed engineering, design, and procurement work on long lead components for the power conversion system, which is one of the major items required before power operations can commence at the Aurora powerhouse (Key Developments).
Siemens Energy AG has provided a financial outlook for fiscal year 2026, including guidance of 11% to 13% comparable revenue growth for the group and net income in a range of $3 billion to $4 billion (Key Developments).

Valuation Changes

Fair Value: risen slightly from €119.92 to €125.04, implying a modest uplift in the modelled equity value.
Discount Rate: edged lower from 6.99% to 6.92%, a small adjustment that supports a higher present value for future cash flows.
Revenue Growth: nudged up from 11.82% to 11.87%, reflecting a marginally higher growth assumption in the projections.
Net Profit Margin: increased from 9.56% to 9.78%, indicating a slightly stronger profitability assumption on future earnings.
Future P/E: reduced from 24.70x to 23.66x, pointing to a somewhat lower multiple used to value the company’s earnings stream.

Overly optimistic expectations for rapid grid modernization, wind business turnaround, and international growth may not account for execution, policy, and affordability risks.
Strong current order intake could mask future margin pressures, working capital strains, and potential revenue volatility from supply chain and market headwinds.
Robust order growth, secular energy transition trends, operational turnarounds, and a healthy financial position all support sustained profitability, resilience, and long-term value creation.

Catalysts

About Siemens Energy

Operates as an energy technology company worldwide.What are the underlying business or industry changes driving this perspective?

The share price may be factoring in an overly optimistic pace of global grid modernization and electrification, as recent strong order intake in Grid Technologies and Gas Services is fueled by major trends like surging data center demand and the energy transition. However, if grid upgrades and permitting slow or if customer affordability concerns in major HVDC projects grow, future revenue growth could fall short of current market expectations.
Investors could be overestimating margin expansion, as the current strong pricing environment in gas turbines may normalize. Management acknowledged that price increases are already tapering, and elevated input costs or increased competition could limit further improvements in net margins and earnings.
The current valuation may reflect a belief in a rapid and sustained turnaround in the wind business (Siemens Gamesa), with breakeven assumed as soon as fiscal 2026. Execution risks from ongoing restructuring, lingering 4.X and 5.X product issues, and potentially slower offshore market growth could lead to continued earnings volatility and delays in restoring net margins.
The stock could be pricing in uninterrupted international growth, particularly from electrification and rising energy demand in the U.S. and emerging markets. However, elevated geopolitical tensions, trade barriers (e.g., tariffs with the EU and U.S.), and unpredictable policy shifts may lead to delayed or lumpier revenue streams.
High current backlog and order intake may create the impression of long-term revenue visibility and strong future free cash flow. This overlooks risks like supply chain constraints, capacity bottlenecks, and large working capital requirements to deliver on these orders, which could compress free cash flow and profitability if execution difficulties arise.

Siemens Energy Earnings and Revenue Growth

Siemens Energy Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Siemens Energy's revenue will grow by 9.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 0.5% today to 7.3% in 3 years time.
Analysts expect earnings to reach €3.6 billion (and earnings per share of €4.08) by about August 2028, up from €198.0 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €2.1 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.8x on those 2028 earnings, down from 393.7x today. This future PE is lower than the current PE for the DE Electrical industry at 42.5x.
Analysts expect the number of shares outstanding to grow by 0.51% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.52%, as per the Simply Wall St company report.

Siemens Energy Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Continued record-high order intake and a growing order backlog (€136 billion, up 65% YoY and diversified across geographies and business lines) establish strong future revenue visibility, contradicting the risk of declining revenues in the long term.
Secular demand drivers-such as electrification (especially for power-intensive data centers), energy transition (offshore wind, grid upgrades, HVDC), and decarbonization policies-are supporting robust multi-year growth in key Siemens Energy markets, which may lift revenues and order flows well into the future.
Turnaround initiatives and productivity improvements at Siemens Gamesa, including the revised 4.X and 5.X turbines and offshore ramp-up, are positioned to reduce losses and potentially return the wind division (currently a drag on group profitability) to breakeven by fiscal year 2026, improving overall net margins and earnings.
Leadership positions in grid technologies and gas turbines (with ongoing capacity expansion, positive pricing power, and increasing service revenues) are likely to sustain or improve profit margins and recurring earnings as long-term service agreements and modernization projects become a greater share of the business.
Stronger financial profile (net cash position of €4.4 billion, maintained investment grade ratings, and de-risked capital structure post-Bund guarantee exit) enables both reinvestment for growth and shareholder capital returns, underpinning the company's ability to sustain dividends and absorb cyclical shocks, thereby supporting long-term valuation and share price stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €83.755 for Siemens Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €136.0, and the most bearish reporting a price target of just €37.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €48.7 billion, earnings will come to €3.6 billion, and it would be trading on a PE ratio of 22.8x, assuming you use a discount rate of 6.5%.
Given the current share price of €98.66, the analyst price target of €83.76 is 17.8% lower. Despite analysts expecting the underlying buisness to improve, they seem to believe the market's expectations are too high.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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